PM Internship Scheme: Can Rs 5,000 stipend make a difference? Here's what experts say

The Central government is planning to roll out its landmark decision for the youth employment later this month by standardizing the stipend amount for interns in the highly competitive job market. The Centre implemented the PM Internship Scheme (PMIS), announced in this year's budget, to address the gap in skill development and provide a solution to the issue of unemployment.

Under the PMIS Scheme young individuals aged 21-24 years from low-income households will get 12-month internship opportunities in the country’s top 500 companies. The pilot phase targets 1.25 lakh interns, who will get a monthly allowance of Rs 5,000 for one year and a one-time aid of Rs 6,000.

While the centre will spend Rs 60,000 annually on each intern, the partnered companies will bear the training cost and 10 percent of the monthly allowance from their corporate social responsibility funds.

It must be noted that companies are allowed to pay the interns above the stipulated amount if they wish to. However, they are prohibited from adjusting the additional amount against their CSR obligation.

'The minimum stipend'

Internships have come in various forms in terms of monetary compensation across industries. Before the implementation of PMIS, internship stipends in India varied significantly based on industry, company size, and intern qualifications.

Sachin Alug, CEO of NLB Services said that be it an unpaid internship or a five-figure compensation, businesses have followed their own norms when it comes to stipends.

According to Shantanu Rooj, Founder and CEO, of TeamLease Edtech, Students from top-tier institutions often secured internships with stipends ranging between Rs 50,000 to Rs 3 lakh per month, reflecting the premium placed on talent from prestigious colleges. However, these opportunities were limited to a select group, with many interns from smaller institutions or lesser-known colleges receiving minimal or no financial remuneration, often working unpaid to gain experience.

Manmeet Singh, CEO of FirstMeridian Global Services and Innovsouce told Storyboard18 that some companies pay between Rs 2,000 and Rs 10,000 stipend to the interns based on the size of the employer.

"Small startups and informal companies typically pay lesser stipends. Large enterprises or corporates were offering higher stipends in the Rs 7,000-Rs 10,000 range," Singh said.

Prior to PMIS, 10 percent of postgraduates from B-school never received any stipend, according to the talent attraction, assessment and hiring platform Unstop. Only 5 percent received a stipend of less than Rs 10,000, while only 33 percent received less than Rs 50,000.

On the other hand, 13 percent of the undergraduates from E-School, A&S, received a monthly stipend of less than Rs 50,000 while 33 percent never received any offer.

Ankit Aggarwal, Founder and CEO of Unstop said, "We believe the story of the PM Internship Program goes beyond the stipend. The current stipend of Rs 5,000 gives students a chance to work with top brands and upskill".

What's ahead?

Experts have said that PMIS will offer exposure to youth but the real impact will be clear after six to nine months whether it can create more sustainable jobs with better trained candidates.

According to Alug, the PMIS Scheme will play an instrumental role in motivating and remunerating underprivileged youths and is available to candidates who don't have a family member earning upward of Rs 8 lakh per annum and have a government job.

"By collaborating with India's top 500 companies, the scheme exposes interns to real-world business environments, enhancing their employability. Moreover, the scheme's emphasis on skill development aligns with the broader goals of improving employability, stimulating economic growth, and promoting sustainable development," Rooj added.